Government and campaigns
On Wednesday 25 November Chancellor Rt Hon. Rishi Sunak MP delivered his Spending Review, a fiscal announcement promising to deliver stronger public services and greater investment in infrastructure. Breaking with tradition the Spending Review covered government public spending for just a single year, rather than the typical four-year spending cycle. Although the spending review was short term in nature, it was not short in terms of investment funding for jobs. Below are the three key takeaways for the labour market.
Read REC's response to the Spending Review
To combat the upcoming surge in unemployment, the chancellor confirmed that the government will be investing £3bn in a three-year Restart programme. The three-year scheme will be open to people who have been out of work for more than 12 months and will provide them with regular intensive support in finding work. It is thought that the scheme will be aimed at older workers, however more details are to be announced. In addition to the Restart scheme, the treasury will fund a further £1.4bn to increase the capacity of Jobcentre Plus. The REC has already started working with members to support the Kickstart scheme to facilitate more jobs for people in our industry. The Restart scheme offers similar opportunity for recruiters to help unemployed workers transition to more growing industries. The REC will be following up with government to make the strong case that recruiters should be front and centre for providing the expertise needed to make the Restart programme a success.
There was confirmation from the chancellor that the government was moving ahead with its plans for a Lifetime Skills Guarantee, with the treasury investing £375 million in the scheme. In September, the Prime Minister announced his plans to launch the guarantee to give adults the chance to take free college courses valued by employers. The REC believes that this is a welcomed step in the right direction, an investment in skills and education is crucial to avoiding long-term mass unemployment and delivering job creation. During his announcement on skills, the chancellor also committed to making the apprenticeships system work better for businesses. The REC has long been campaigning for the apprenticeship levy to be broadened into a flexible skills levy. A broader could be used to fund Ofsted regulated training courses to help the recruitment industry transition workers from the worst affected sectors to those least affected by the crisis.
In following with recommendations from the Low Pay Commission (LPC), the National Living Wage (NLW) will rise by 2.2% to £8.91 per hour and will be extended to those aged 23 and over. For a full-time worker on the NLW, that's an increase of £345 per annum next year. Two million workers are expected to benefit from this increase once it comes into effect in April 2021. When providing evidence to the LPC last summer the REC called for a cautious approach on future NLW increases due to the uncertainty of the market and feedback from members. When surveyed in the summer 15per cent of REC members said an increase NLW above £8.72 would force them to freeze hiring and a further 14 per cent said it would have to make redundancies or reduces the workers for current workers. The REC has long been calling for government to reduce the cost of the NLW to incentive firms to preserve their staff. As the chancellor made clear at the start of his speech, now more than ever is the time to protect jobs and livelihoods.
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